| The Standing Committee of the National People’s Congress promulgated "Law of the People’s Republic of China on Enterprise Bankruptcy" on August 27th,2006 to replace "Law of the People’s Republic of China on Enterprise Bankruptcy-trial version" issued in the year 1986, and came into force on June 1st,2007. The promulgation of this law has significantly changed our bankruptcy legal system, reorganization system of which is added to adopt a single code as legislative example for bankruptcy and reorganization system. The reorganization system becomes one of the top three bankrupt procedures with compromise and bankrupt liquidation systems. It’s very important for an innovative legal system to officially create reorganization legal system for enterprise who suffers from hardship.Reorganization system means not to immediately process bankrupt liquidation against enterprise who suffers from hardship and loses or may lose solvency but worth rescuing. Instead, the court leads all interest parties to coordinate for business renewal and debt liquidation by law enforcement. It’s a system that the debtor is able to continue business after the debtor, administrator and creditor reach an agreement to formulate a reorganization plan, and request debtor to wholly or partially liquidate debts in a certain time and by a certain way. Enterprise can recover through reorganization procedure, by which balance interests of creditors, investors, stockholders and enterprise employees achieving goal of maximization for economical benefit and avoid the relevant social problems due to enterprise’s bankruptcy. Social significance is of no doubt for an enterprise that can continue to influence social economical life.The purpose of bankrupt procedure is for liquidation, which is unable to support enterprise renewal; while compromise system negatively abates sharply reality in the traditional liquidation, however, it’s still unable to positively avoid bankruptcy. Therefore, reorganization system which can aggressively renew operational value for enterprise is exactly a new approach to solve operating problems for the enterprise which suffers from hardship. Furthermore, bankruptcy law is not only an exit mechanism but also a supreme strategy and relief solution for enterprise renewal. This purpose of reorganization procedure aims to how to balance interest conflict between each interest party and the whole society. Considering the whole interest for society, enterprise without continuous operating value will be excluded in reorganization procedure; this design is to balance each interest party’s benefit once creditor’s meeting approves reorganization plan enterprise presented. To avoid personal interest influencing society’s whole interests, compulsory licensing procedure is designed for the court to protect personal interest and compulsorily license reorganization plan to balance conflict between the whole society and each interest party if creditor meeting cannot reach common consensus. Reorganization plan is the core of reorganization system and the interest party will abide by responsibility and obligation as specified. If unreasonable and realistic debt repayment plan impedes credit negotiation from processing, the enterprise will lose renewal opportunity. This study is focused on reorganization plan to present concept principle and structure for the formulation on basis of our current legal system by referring foreign legislative examples as well as supplementing selected case studies, court’s trial practices and expert’s opinion for practical application.The full text subject to research for Enterprise Reorganization Legal System including five aspects "Debt Liquidation Legal System", "Enterprise Reorganization System", "Reorganization Procedure", "Reorganization Plan" and "Reorganization Examples for the companies". In light of reorganization system is one of debt liquidation system, this text begins with the concept for the whole debts liquidation legal system for the purpose of overall comprehension and discusses contents and optional application for debt liquidation procedure; secondly, explains the whole structure for liquidation system and the relevant contents for enterprise bankruptcy law to analyze our current reorganization legal system, including legislative history, rules of law and flexible principles for each stage’s reorganization procedure; and criticizes the relevant contents of reorganization plan to propose against the draft of key reorganization plan through reorganization examples for the companies, which is expected to benefit economical interest for stockholders, employees, creditors and the whole society and avoid waste in judicial resource and loss for personal advantage to yield effectiveness for the legislative reorganization.In the recent years, fast change for the overall economical environment causes increasing percentages for enterprises which have financial problems. Gradually increasing reorganization applied for becomes a field of company’s reorganization which is emphasized by the legislators, expecting to improve the relevant regulations to offer much friendly and better environment for enterprise’s owner. |
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